1. Field of the Invention
The present invention relates generally to financial indexes, and more specifically, to a weather-based financial index.
2. Related Art
Weather provides risk in a financial marketplace. For example, weather may effect the price of a security, an equity, or a commodity. Several techniques have been introduced in an attempt to provide protection against weather-related risks. For example, weather futures may be traded on the Chicago Mercantile Exchange. In another example, over-the-counter derivatives, which are based on the average temperature over a predetermined time with respect to a reference temperature, may be traded as swaps or options. However, such risk management techniques generally do not provide liquidity and have been shunned by the financial markets.
What is needed is a method, system, and/or computer program product that addresses one or more of the aforementioned shortcomings of conventional weather-related risk management techniques.